VHI, the Irish
State health insurer, today warned that if recommendations contained in a report
into the way it handles claims were implemented, doctors would lose the right to
determine the type of care patients required and it would be transition to a
US-style system. The comments were in response to a US consultancy report
that was commissioned by Health Minister Mary Harney.
Harney said on Tuesday that the report had found
the VHI was paying out too much to hospitals and could make savings of up to 10%
if it managed its dealings with them more aggressively.
The VHI said the Milliman Review contains
commercially sensitive information and it is agreeable to the publication of an
agreed redacted version of the report which does not contain this information.
It says Milliman’s primary recommendation is that VHI should transition to a US
style utilisation management company and Milliman has expressed the view that
health care savings could be achieved by VHI becoming a US-style
utilisation company. Effectively what this means is that VHI would transition
from an organisation which currently funds the needs of customers to one
that actually determines what level of care and the type of treatment which
customers would receive. So, rather than the consultant in a hospital
determining the care pathway for patients, VHI would enter into new
agreements with consultants and hospitals and its customers whereby the care
pathways would ultimately be determined by VHI.
Becoming a US-style utilisation company
will require VHI to invest in and set up significant pre-authorisation
processes, concurrent review processes and post care review processes. Pre-authorisation
would require the consultant treating the customer to obtain VHI’s sign-off on
the proposed care pathway and in the event that VHI did not sign-off, the
customer’s costs would not be reimbursed. Concurrent reviews would involve VHI
staff continuously monitoring the health status of patients to determine whether
they should still be treated and post-care reviews would involve VHI
examining whether the patient should have received the treatment.
The VHI said the board carefully examined the Milliman Review and concluded that
Milliman had not demonstrated that the theoretical savings were either tangible
or achievable in the medium term. It also concluded that transitioning to a
US-style utilisation company would require a very significant upfront
investment and would be a long and complex journey. It said US health insurers
internal administration costs per customer currently average between €230 to
€300 per customer and these costs are 4 to 5 times the level of VHI's. Milliman
acknowledged that VHI’s internal costs would increase.
Jimmy Tolan, chief executive of VHI said:
“VHI faces very significant funding challenges over the next ten
years as our customer base continues to age. We anticipate that we will have to
deliver significantly more care in critical areas such as cancer, cardiac,
orthopaedic and managing chronic conditions. We welcome all constructive inputs
including input from Milliman and the Department of Health & Children as we
grapple with the challenge of funding our customers’ needs."
If reports would solve the black hole that is the
Irish system where wealthy medial consultants straddle the public and
private health systems, there would have been a solution a long time ago.
The next minister will likely commission a report
from a European consultancy.
What is clear is that the current Health
Minister, Mary Harney, will leave office in coming months after a period of over
6 years and a record of failure.
VHI says it currently spends 96% of its customers’ income
in meeting the healthcare needs of its customers - - which has required 2011 premium hikes of up to 45%. The key
areas of expenditure on behalf of customers are in the
following healthcare areas:
|Type of Care
Expenditure in 2009
|Cancer and related
|Cardiac and related
|Symptoms and general
|Nervous system care
|Mental health care